AS Economics Unit 3 Exam technique

Marks and timings The exam is one hour, 30 minutes, and has 72 marks available That is one mark per minute, plus 18 minutes reading time Section A (multiple choice) = 32 marks; 35 minutes Section B (data response) = 40 marks; 50 minutes

Multiple choice – marks 4 marks in total: 1 mark for correct answer 1 mark for definition 1 mark explaining why correct answer 1 mark for either evaluation, diagram, explaining why the others aren’t correct or further explanations and/or definitions

Multiple choice – tips Answer the easiest ones first, you can always go back to the others You can also go back later and add anything extra and/or a diagram to support your answer Some can be answered by the ‘process of elimination’ Always give definitions Underline/highlight parts of the question to be sure and make sure you are answering the question Draw a diagram where appropriate

Multiple choice – common topics Market structure - Concentration ratios, diagrams of all four market structures (and changes in them), assumptions, normal and supernormal profits, short run and long run Cost and revenue curves (particularly AR and MR, but AC and MC as well) Calculation of AC and MC (but also AR and MR) Allocative (P=MC) and productive (AC=MC) efficiency Price discrimination Contestable markets and contestability Competition Commission Collusion Economies of scale Integration Objectives Barriers to entry

Data response – marks 4 = 2 points/definitions + explanations 8 = 2 definitions + 2 points applied and explained + 4 evaluation 12 = 2 definitions + 3 points applied and explained + 6 evaluation 16 = 2/3 definitions + 3/4 points applied and explained + 8 evaluation (including weighing up both sides of the argument and the stronger case)

Data response – tips Read through both questions 9 and 10 first (5 minutes) and pick which one you are most comfortable with the questions of – indicate which you are answering in the box Underline/highlight key points in the case and the question – make sure you are answering the question Do the first question straight away, it is often the easiest Always give definitions Apply all answers in the context of the question The data is there to be used Develop your points, explaining fully – don’t be afraid to use up the paper! Always, where possible, include a diagram Remember, two of the questions are worth 28 out of the 40 marks (70%) – plan them, and put in the effort, explanations and evaluation they deserve.

Evaluation points Argue both for and against Make a reasoned judgment The _________ could depend upon:  Time (and time lag)  Magnitude/size of ________ (cost, revenues, changes in, economies of scale, price discrimination – many points)  Opportunity cost (e.g. could be spent on something else)  Impact  Other factors (e.g. the extent of the competition, how well the economy is doing, other firms in the market, etc.)  Type of competition in the market, barriers to entry and exit, assumptions of market, contestability  Competition commission  Do the advantages outweigh the disadvantages or vice versa?  Which is the stronger case? See the ‘Evaluation phrases’ sheet

Data response – common topics Contestable markets Four market structures (extensive), costs and revenue and their curves (falls and rises in), assumptions, barriers, etc. Effects of _________ on firms, consumers and industry/market Factors that affect _________ Reasons for _________ Efficiency Integration Price and non-price strategies Objectives and motives Public sector involvement (and Competition Commission) Collusion Game theory Price discrimination